We shed no tears for Osama bin Laden. The most outrageous act of terrorism in modern times has led to the most gigantic manhunt and most costly tit-for-tat war. America's joy, as much of relief as of delight, is understandable. But the thesis must now be put to the test, whether an idea is more potent when its creator has died for it than when he was alive. Killing Bin Laden removes Bin Laden, but not al-Qaida or its cause. It will not end his franchise on jihadism. We must assume a furious bout of retaliation from those prepared to die in his name.

The challenge now is not for the Muslim world but for the west. Can the clock be stopped on the "wars of 9/11"? Can time be called on this rerun of the medieval crusades, America's (and Britain's) massive retaliation? Can the craving for revenge that fuelled the US's astonishing 10 years of war against weak but curiously potent foes at last abate?

I recall the Afghan diplomat who told me in the weeks between 9/11 and the assault on Kabul of October 2001 that, provided the west did not go to war against Afghanistan, "Bin Laden is dead". A Pashtun loya jirga in Kandahar that September had come near to demanding that Mullah Omar expel Bin Laden and his Arabs. The view of observers was that opinion was moving against Omar's indulgence of them.

Above all, al-Qaida's murder of the Tajik hero Ahmad Shah Massoud two days before 9/11, meant that every loyal Tajik wanted Bin Laden's blood. He and his hated Arabs had become "unwelcome guests" in Afghanistan, and had now undermined a mild Taliban rapprochement with its old friends in Washington's CIA. Leave Kabul alone, my informant said, raise the blood money and Bin Laden's days were numbered. Above all, make sure the Taliban are not driven into the arms of al-Qaida, or Bin Laden the reckless menace will become Bin Laden the saint.

This advice was widely disseminated, but gained no hearing. The hysteria of revenge was overwhelming and the drums of war deafening. Who knows how many tens of thousands of Afghans died, and are still dying, to avenge Bin Laden? There can be no computation of the billions of dollars blown on the project, nearly bankrupting the US government. The Taliban were duly punished and the west trapped in ill-conceived "nation-building" in Afghanistan. American and British governments were so besotted by terrorism that they persuaded themselves of a new and fanciful threat from a wholly unrelated Muslim state, Iraq. Yet more thousands of Muslims died and billions were spent in the process.

The west thus entered the 21st century massively ignoring Eisenhower's warning of what happens when too much power is vested in the military-industrial complex. Soldiers demanded "surges" and politicians capitulated. The continued drone bombing of Pakistani villages – starkly counter-productive, say the WikiLeaks revelations – shows there is nothing more lethal to peace than a general out of control with a new piece of kit.

To what end? A few nasty guys have gone, in a world awash with them, and the west has lost its peace dividend. Britain, the US and western values in general have not emerged from a decade of conflict with their reputations enhanced, quite the reverse. A new centre of regional instability has been created in Pakistan, where it is clear that the military was sheltering Bin Laden. There is no "conquest" of the Taliban to be had, as there never has been in history. There is only a deal between the tribes and warlords of this troubled land, under the aegis of the neighbouring Pakistani state. It is America that has been al-Qaida's recruiting sergeant in the region.

There are many well-meaning people in Britain who supported the Afghan war. They felt, out of some vague post-imperial guilt, that it was the west's "manifest destiny" to punish wrong-doing wherever it could, and to aid political and economic progress in the Muslim world. Even they must now wonder whether the game was worth the candle, whether the resources expended on the wars in Afghanistan and Iraq might have achieved their goals more peaceably.

Westerners cannot begin to comprehend the devastation their armies and bombers have inflicted on poor people who have the flimsiest of political and economic structures to survive them. The idea that the Afghan people can sensibly "choose" between the west and the Taliban is nonsense. All they want is peace, and all the west has brought them is war. It will take decades for the wounds to heal, and they will never be healed by western arms.

The test for Washington and London in the aftermath of Bin Laden's demise is to recapture some strategic initiative, so as to meet the declared policy of a steady withdrawal from the Afghan theatre. This will require supreme restraint in reacting to whatever is the response of militant Islam to Bin Laden's death. There is one obstacle to this. Supreme restraint is a phrase markedly absent from the lexicon of western diplomacy towards the Muslim world.